The domestic stock market is showing weakness as it reflects the negative impact of China's open-source artificial intelligence (AI) DeepSeek, which shook global markets during the Seollal holiday period. Semiconductor-related stocks such as Samsung Electronics and SK hynix, along with electric cable and power stocks, are sharply declining, dragging down the index.
As of 12:15 p.m. that day, the KOSPI index recorded a decrease of 36.68 points (1.41%) from the previous trading day, standing at 2,500.47. Foreign investors alone sold a net 1.05 trillion won worth of stocks, contributing to the decline in the index. Individual and institutional investors were net buyers of 831 billion won and 197 billion won, respectively.
The index opened down 2.47 points (0.10%) at 2,534.33 and quickly widened its losses in response to the shock from the Chinese AI startup DeepSeek and the Federal Open Market Committee's (FOMC) decision to maintain the benchmark interest rate during the holiday.
Amid the shock from DeepSeek, SK hynix is trading down 21,900 won (9.91%) at 199,100 won. Semiconductor stocks including Samsung Electronics and HANMI Semiconductor are showing weakness across the board. Electric cable and power stocks such as LS ELECTRIC, HD Hyundai Electric, Gaon Cable, and Cheryong Electric are also experiencing sharp declines.
There had been expectations that high-performance chips and large amounts of power would be necessary for training generative AI models, but the news that DeepSeek showcased performance similar to ChatGPT while requiring only about 7.9 billion won in development costs is believed to have negatively impacted investment sentiment for AI infrastructure-related corporations.
At the same time, the KOSDAQ index recorded a decrease of 3.68 points (0.50%) at 725.06. While foreign investors are net sellers of 33.2 billion won, individual and institutional investors are net buyers of 3.8 billion won and 2.3 billion won, respectively.
In the KOSDAQ market, stocks such as Alteogen, LigaChem Biosciences, and Enchem, as well as Cheil Electric, Semyung Electric Machinery, and Cheryong Electric, are all declining. Lunit is falling by over 5% following news that its second-largest shareholder and strategic investor (SI), the U.S. company Guardant Health, sold all its stakes at the end of last year.